AUD/USD pares intraday gains, struggles to find acceptance above 0.7100 mark

The AUD/USD pair maintained its bid tone through the first half of the European session and was last seen hovering near the top end of its daily trading range, just below the 0.7100 mark.

The pair attracted fresh buying on the first day of a new week and built on Friday's late bounce from the 0.7050 area, or a multi-day low touched in the reaction to the stellar US NFP print. As investors digested mostly upbeat US employment details, retreating US Treasury bond yields undermined the US dollar and extended some support to the AUD/USD pair.

The uptick, however, struggled to find acceptance above the 0.7100 mark amid the prevalent cautious market mood, which tends to weigh on the perceived riskier aussie. Apart from this, speculations for a larger Fed rate hike move at the March policy meeting acted as a tailwind for the USD and capped any meaningful upside for the AUD/USD pair, at least for now.

Investors now seem convinced that the Fed would adopt a more aggressive policy response to contain stubbornly high inflation. Hence, the market focus now shifts to the release of the US CPI report for January, due on Thursday. The data will play a key role in influencing the USD price dynamics and help determine the near-term trajectory for the AUD/USD pair.

In the meantime, the US bond yields will drive the USD demand amid absent relevant market-moving economic releases on Monday. Apart from this, traders will take cues from the broader market risk sentiment for some short-term opportunities around the AUD/USD pair.

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